Dividends4Life: Dividend Stocks Are The Perfect Kid's Savings Account

People have always said that my son’s an “old soul.” Perhaps that’s because he’s never been as wild as most boys. He’s contemplative, serious and has a long attention span. And as I was writing my book, Get Rich with Dividends, he was annoyed that I was so busy. He finally asked me what the book was about. So I taught him a bit about the stock market. Once he understood the basic concepts, I explained to him the power of dividends. More specifically, how compounding dividends can triple your money or produce extremely high yields in a matter of years.

The key is to buy a stock with a decent dividend – and reinvest that dividend to buy more shares. This generates more dividend cash to buy even more shares, which racks up higher dividend payouts… and so on. You eventually get to a point where it doesn’t really matter what the stock price is doing. You still make money no matter what. In fact, a dip in share price can work in your favor, since you can reinvest your dividends at a lower cost. In the end, the results can be mind-boggling.

Source: Investment u

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